A New Jersey jury has awarded a company nearly $32 million after it sued KPMG for negligence; with interest, the verdict amounts to over $41 million.
The case involved audits of Papel Giftware, a Cranbury, N.J.-based company that Cast Art acquired in December 2000. Cast Art, a company based in Corona, Calif., sued KPMG in 2003 for professional malpractice and negligence for failing to detect financial fraud at Papel before Cast Art bought the company. During the trial, the plaintiffs charged that KPMG partners knew of the fraud being committed by Papel but purposely overlooked it in order to assist the chairman of Papel's board, who provided significant business to KPMG.
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